Many of these bubble era funds struggle to make money. Of the 15 early, late, balanced and generalist SFERS funds with vintages of 2000 to 2002, eight have positive IRRs and seven have negative ones, according to a peHUB analysis of the pension fund’s June 2011 portfolio report.
Among just the balanced and generalist funds (the focus of this week’s slideshow), only two have returned more cash than general partners called. Others hang onto potentially lucrative portfolios, hoping for their exit market fortunes to shift.
The majority, however, failed to make good on expectations of lucrative distributions in a fundraising cycle gone astray. The median IRR among the balanced and generalist funds from this period is -1.95, the analysis found. Four of them look unlikely to ever turn the corner, with the value of their distributions and portfolios together well below contributed cash.
In the past two weeks, we’ve examined the late and early stage holdings in SFERS’ diverse and disciplined portfolio. This week’s focus on balanced and generalist funds highlights investments from the early years of the past decade. (Next week we will look at the more promising investments of the second half of the decade.)
Several fund managers deserve to be called out for navigating this difficult environment. Battery Ventures and Sprout Group both returned more capital than called, though just barely. Polaris Venture Partners and Weston Presidio Capital have existing portfolios that could rescue the fortunes of their funds.
In the following slideshow, we list the funds and their IRRs from worst to best. As a point of background, SFERS had assets under management of $13 billion at the end of fiscal 2010 with 3.8% of them in venture.
Firm: Advanced Technology Ventures
Commitment: $20 million
Cash In: $20 million
Cash Out: $6.25 million
Portfolio Value: $2.37 million
- Top 10 IRRs from University of California’s Mid-Decade Venture Binge (Slideshow)
- Slideshow: CalPERS’ 2008 Banner Year for Venture: Top Commitments and Current IRRs
- California Pension Fund’s Diversified Approach To Venture Appears To Benefit Performance: Slideshow
- Slideshow: New Venture Commitments Fall At Utimco, But Vintage 2007 IRRs Look Promising
- Slideshow: CalPERS’ Recent Vintage Brand Name Venture Funds Show Promising IRRs, Largely (Part II)